Thursday, April 7, 2016

The Financial Times released a well-produced
fifteen minute video last month on the present state of the Chinese economy. It’s
entitled “The End of the Chinese Miracle.” It can be watched here.

I like the texture and flavor of contemporary China this
video gives. It has long shots of factory life, daily life in urban areas, and scenes
in smaller cities and rural outposts. There are also insightful uninterrupted narrations
from the factory workers who’ve been the drivers in China’s economy over the
past decade.

The most important point highlighted in the video is the
difficulty that those who only just recently began to participate in China’s new economy
over the past decade now face. Folks from the countryside who, during
the low hanging fruit years of China’s boom, could easily go to a big city to
find work now don’t have as many options. The big factories in Chinese megalopolises
manufacturing goods for the rest of the world just don’t have the demand anymore
for the endless supply of rural Chinese citizens. There are now millions of
people throughout China wondering where their place is in the country.

In the long-term, macro view, there is still a lot to like
about China’s position in the global economy. It is set up well for, I think, continued
growth in its prominence and importance. There will be a tough transition coming,
though. The explosive growth of the past twenty five years will not be able to
be replicated. It will be a grind and serious test of the country’s leadership
to continue to meet the demands of the population who has begun to taste the
fruits of a higher standard of living.